FX Hedges May Not Stay Cheap

Investors looking for safeguards against emerging risks in the placid foreign exchange market may want to act now -- before global central banks start to make waves later this year.

That’s the message from both Standish and Wells Fargo, who view the prospect of tighter global monetary policy as a potential trigger for increased turbulence. The rocky times may arrive sooner than current volatility levels suggest, with the European Central Bank fine-tuning its exit from quantitative easing and the Federal Reserve continuing to hike interest rates.